(July 18, 2016, 4:40 p.m.) -- To borrow a phrase from American Pie: there's "bad news on the doorstep." The California Public Employees' Retirement System (CalPERS), to which the City of Long Beach pays money to pay City Hall negotiated city employee pensions, announced today (July 18) that it only earned a preliminary 0.61% percent net return on its investments for the 12-month period that ended June 30, 2016.
That affects Long Beach taxpayers because CalPERS will ultimately ask LB City Hall to pay CalPERS for whatever CalPERS' investment income didn't deliver...and the City of Long Beach has a sizable exposure as the largest participant in the CalPERS system. [Scroll down for further.] |
In response to an email today seeking comment(s) on impacts on the City of LB from CalPERS' thin return on its investments over the past twelve months, LB City Hall's Director of Financial Management, John Gross replied by email: Mr. Gross [email]: The City follows CalPERS investment returns during the year and the overall result is not surprising. Deviation from the actuarial investment return assumption of 7.5% either increases or decreases the City's costs beginning three years later. We do not have an exact number for this particular year and our cost estimate approaches do not calculate the impact of any single year. The City expects CalPERS pension costs to be a significant cost factor over at least the next several years. Developing. Further to follow on LBREPORT.com.
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